Q: I lost my job. I cannot make the car payments. Can I give it back? I have never been late

A: Losing your job and being unable to make car payments is a difficult situation. You have the option to voluntarily return the car to the lender, which is known as a voluntary repossession. This means you give back the car willingly before the lender has to take it back. While this can help you avoid some fees associated with involuntary repossession, it still impacts your credit score.

Before taking this step, contact your lender to discuss your options. Many lenders offer hardship programs or payment deferrals for individuals facing temporary financial difficulties. They may be willing to work out a revised payment plan that is more manageable given your current situation.

If you decide on voluntary repossession, make sure to get all the details in writing, including any fees you might owe after the car is sold. The lender will sell the car to recover the loan balance, but you might still be responsible for any remaining balance if the sale doesn’t cover the full amount. Understanding these details will help you make the best decision for your financial situation.

A: Speak with the lender. The route you contemplate is better than repossession, but it would still be advisable to have a discussion with the lender about what options are available, per the financing agreement. I hope things turn around for the better and you find another job soon. Good luck